The Investor Diary Entry #37: May 7, 2023
I am slowing down on my investment activities these days, and concentrating more on reading. I already picked the next stock that I want to research, and started reading its latest annual report, I will be talking about it in future entries, maybe during this week.
I am now in my second revision of The Psychology Of Money, and thought that I finished analyzing its second chapter about Luck and Risk. It seems that I am not done with this chapter yet.
The question of what we can learn from successful people has been for many years on mind. The idea of reading the success stories of individual successful people to try to learn something from their journey to emulate it in my own life, has always presented challenges that I could not really pin down until recently.
Investing Role Models
Choosing role models have always been confusing for me. You read about one successful person who persisted on one singular goal until he/she was able to achieve it. Then you move to read about another person who realized that this thing was not working and moved to do something else which he/she excelled at and became a world leader on.
So should I persist or should I move on? I know persistence is important, and I also know that we should be aware of the indicators to know when to move on to something else. This was taught continuously through different business models.
Regardless of the field of the role model, including investing role models, this confusion is always there, though it appears more evidently within successful investors. Successful people don’t move in packs, but they do come together for their own growth, but the main thing that you find about them is that they hunt on their own not in groups, especially successful investors.
Therefore, my own conclusion, if I want to be a successful investor I need to find my own way and hunt on my own with my own self developed methodology if I want to become a successful investor.
Furthermore, in investing it is known not expect to over perform others, if you are doing what the others are doing. If we want to continue this logic, one might say that I want to perform just like successful investors perform, therefore, I want to emulate what they are doing to be able to achieve the performance and the success that they achieved.
Actually, this last statement is not totally wrong. There is one example of a very well-known investor who studied and copied what Warren Buffett was doing, and was able to become one of the best known investors. This example was explained in the book Richer, Wiser, Happier, by William Green.
That story was great, but still didn’t convince me to take it as a model to follow. There are a lot of missing pieces from the story for me to be able to copy this model. The missing pieces are not in the model, but in the story that will not give you the full details of how exactly that person did the copying.
The Luck & Risk Factors
In the previous entry we discussed our understanding of the second chapter of the Psychology Of Money which discussed the concepts of Luck and Risk in the path of successful investing.
This same chapter ended with the warning of not emulating individual success stories, but to pay attention to broad patterns that will help one in the investing journey to success.
The reasoning is that each individual’s success or failure is based on how luck and risk played within the decisions and actions that they took. Now, this made sense to me.
I don’t think that luck and risk are the only distinguishing factors between the different successful or failure stories, but for sure it is one of the most important ones to take into consideration.
The first chapter also presents another distinguishing factor between different stories. The environment, the markets, the background, and many other factors all play an important role in make each successful story or a story about failure a unique experience.
What Can We Learn From Successful Investors
Whether we are talking about successful people in general or successful investors, what we can learn from them are broad patterns. Things like mindsets, habits, general investing strategies, decision-making methodologies and patterns … etc.
Many successful investors talk about following the value investment strategies. They talk about how they spend their days reading financial statements and reports.
Almost all the successful investors talk about neutralizing feelings when making investment decisions and actions.
In my point of view these are things that can answer the question of what can we learn from successful investors, and in the same manner choose such patterns to answer to more general question of what we can learn from successful people.
The One Thing That I Learned
There is one common word that is shared between all the successful people that I read about whether they were investors or otherwise; the repetition of the word “boring.”
Successful people always concentrate on having a repetitive daily routine that they make sure that they don’t deviate from. Successful investors try as much as possible to choose boring companies.
Successful people do not live on the edge in their daily routine, they live on the edge with the detailed actions and decisions that they take within their routine. Successful investors don’t look for the next exciting company, they look for ways to analyze companies in a way that no other was able to. They try to see things that no one else was able to see.
Conclusion
Writing this entry made realize the best way to distinguish between the way I read The Psychology Of Money and reading Richer, Wiser, Happier.
I need to read Richer, Wiser, Happier, bearing in mind the teachings of The Psychology Of Money. In the first book there are a lot of examples and stories about individual successful investors, and while reading it, the mind tends to try to learn from each individual story being told.
The Investor
Sunday 7 May 2023
About The Author
I started to look into individual stocks in January 2022. I created this diary initially for myself to track my investing progress, and second as a place that I can share my ideas publicly hoping that others will share their ideas and learn from each other, and lastly as an online business where some links that I share are affiliate links, and if anybody bought anything by clicking those links I will get a commission based on that successful sale, which of course will not affect the price that you are buying the product or service at.
For a more detailed information on my affiliate disclosure please refer to the Full Affiliate Disclosure page, and if you are interested in building your own online business you can check this post here.
Furthermore, this site is in no way or form is giving any financial or investing advice, nor it is encouraging or discouraging people to buy or sell any financial instrument. This is a personal diary in which I track my own progress and share for informational, educational and entertainment purposes.